PRINCETON, N.J. -- When Americans are asked what steps should be taken to reduce gasoline prices, no consensus appears, but a majority favor imposing price controls, by a 53% to 45% margin, according to a new Gallup Poll. Americans also support releasing supplies from the federal Strategic Petroleum Reserve (58%) and drilling in U.S. coastal and wilderness areas now off limits (57%). On the other hand, a majority oppose rationing gasoline (79%), re-instituting the 55-mph speed limit (56%) and suspending the federal tax on gasoline for the summer (52%).
The intensity with which Americans [image-nocss] see oil companies as "gas price villains" may be fading a little, according to opinions respondents volunteered in the poll, conducted May 19-21. Over the past year, the percentage of Americans blaming the oil companies for skyrocketing gasoline prices fell from 34% to 20%; the percentage pointing to oil refinery problems fell from 16% to 9%; and those attributing the increase in prices to problems in the Middle East and the Iraq war fell from 13% to 8%.
The percentage of Americans suggesting prices are increasing as a result of the economic forces of supply and demand increased from 10% to 15%, while 6% now point to speculators and 4% to the shrinking value of the dollar and the poor U.S. economy—both new reasons not even mentioned a year ago. More Americans also mention crude oil prices, the shortage of oil supplies and U.S. dependency on foreign oil.
As gasoline prices continue to increase, the financial hardship they create not only affects more people, but also increases the severity of hardship felt by those who can least afford it, Gallup said. While the continuing surge in oil and gasoline prices has some basis in reality because of the limited supply and the increasing demand in such emerging countries as China and India, Congress also heard testimony last week explaining some of the ways these markets are being affected, and possibly manipulated, by new financial and speculative forces.
This makes for an explosive brew in an election year. Frustrated by political deadlock and inaction, Americans are beginning to consider some more drastic efforts to control the surge in gasoline prices at the pump. For example, a majority of Americans now support drilling in U.S. coastal and wilderness areas. But the favorable margin of 57% to 41% doesn't seem like enough of a consensus to break the energy policy deadlock in Congress.
More significantly—and worrisome from an economic perspective—a majority of Americans now support instituting controls on gas prices at the pump. While the favorable margin of 53% to 45% doesn't presage immediate, or even eventual, political action, it does suggest that record gasoline prices may be reaching a tipping point where Americans are willing to have the government intervene in the marketplace with the hope of providing some significant price relief at the pump.
While price controls may seem like a simple solution, economically, they simply do not work over time, according to Gallup. Right now, gasoline in the United States is being rationed—and supply and demand balanced—by price. In fact, significant "demand destruction" is taking place as Americans are driving less. What price controls do is artificially hold down gasoline prices, preventing a further decline in the demand for gasoline while simultaneously reducing the incentive for companies to produce more.
Economic analysis suggests that the almost inevitable result of gasoline price controls would be gasoline rationing—and no one who knows the history of the gasoline lines of the 1970s wants a recurrence. For that matter, Americans oppose the idea of gasoline rationing by a 79% to 20% margin.
While Gallup's new poll results suggest that the link between price controls and rationing might be a good and effective argument against the imposition of price controls on gasoline, Americans' dissatisfaction with record fuel prices may be reaching a tipping point where emotions may well supersede logic, the polling company said. That is how wage and price controls became law in the United States in the 1970s. Unless something is done to stop the hemorrhaging at the gasoline pump, it seems Americans and their political representatives might end up supporting some radical government interventions in the marketplace this election year in the hope they will provide at least some short-term relief at the pump, concluded Gallup.
Click hereforgraphs and other gasoline-related Gallup polls.
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